In recent months, Morocco has become a destination of choice for Gulf real estate investment. Qatari Diar Real Esate Investment Company and Saudi Arabia's Kingdom Holding have unveiled plans in the kingdom. The flood of investment has gone some way to dispel concerns. Although relatively stable politically, in the past Morocco has found it tough attracting foreign investment.

Restrictions on currency exchange, bureaucracy and question marks over land ownership rights have been the main obstacles. According to Industry, Commerce & Economy Minister Salaheddine Mezouar, Rabat is pushing ahead with further reforms including providing land on more favourable terms. Emaar's Saphira project to redevelop the 13-kilometre corniche at Rabat is a case in point. Until now, the area has been wasteland and slums, but the government facilitated the deal to ensure the project went ahead.

The biggest single investor will be DIP. It will invest about $12,000 million over the next five years. Unlike Emaar, which will self-fund its new projects, DIP will co-develop with the state-run pension fund Caisse de Depot et de Gestion (CDG), its affiliate SABR Amenagement and institutional investors. 'The government is building an environment for investors,' says Dubai Holding chairman Mohammed al-Gergawi. 'But it's a two-way street. You've got to create the market, the lifestyle, the entertainment and the right golf courses, and then the people will come.'

The demand already appears to be there. More than 5 million people visited the country in 2005. According to the country's strategic tourism masterplan, it aims to increase the numbers to 15 million by 2010. The kingdom's strategic location, stunning and varied landscape and cultural heritage will make selling real estate to foreigners easier.

According to Onapar, its luxurious residential golf community Amelkis I, for which villas were sold for in excess of $500,000, was 30 per cent sold to Europeans. Its future target audience will take in Gulf buyers. And with those sort of returns, the likelihood is that Gulf real estate investors will continue to head north.